Cost Accounting unit 4

Part 1

Discuss the two alternatives for product costing systems.  Be sure to address the following:

• How do the two systems differ?
  
• What are the characteristics of the companies that would use each?
  
• Describe the three valuation method alternatives.
  
• Explain why Washburn Guitar uses job-order costing and the costs Washburn tracks.

Part 2

Regarding process costing, discuss the following:

• How do the weighted-average and first-in, first-out methods of process costing differ in their treatment of beginning Work in Process Inventory units?  
  
• What is an “equivalent unit of production,” and why is it a necessary concept to employ in a process costing system?  
  
• Explain why BP uses process costing.
  
• Why does BP not use EUPs or maintain a Work in Process Inventory?